Claudio Osorio (born November 16, 1958) is a Venezuelan entrepreneur and businessman based in Miami, Florida. He rose to prominence in the late 1990s (Osorio was named "entrepreneur of the year" by Ernst & Young in 1997)[ citation needed ] due to the expansion of his company CHS Electronics, formerly a leading international distributor of microcomputers, peripherals, and software that went bankrupt after accounting scandals. [1] [2] The next company Osorio founded, Innovida, also went through receivership and, ultimately, bankruptcy. Osorio faced five separate lawsuits for fraud [3] after investors claimed that millions had disappeared from Innovida's accounts. [3] He and his wife, Amarilis, were also accused of defrauding a charitable effort to build homes in Haiti after the 2009 earthquake. Osorio filed for bankruptcy in 2011. [4] In December 2012, Osorio was arrested and charged for his alleged involvement in a $40 million fraud. [5] In 2013 he was sentenced to 12 1/2 years in jail for fraud. [6]
CHS Electronics had been a public company since August 1994. In 1995, Osorio took it to Nasdaq's smallcap listing. [7] In 1997, CHS Electronics audited accounts reported $4.75 billion worth of sales, and net earnings of $48.3 million. [8] Also in 1997, a $475 million offering of CHS Electronics stock done by Raymond James & Associates [9] was the largest underwriting done outside New York on the year. Nearly 20 percent of the offering went to large foreign institutional investors via its European offices. [10]
By 2000, however, the share price of CHS Electronics had tumbled. Osorio's CHS Electronics filed for chapter 11. [1] Osorio has since been accused of civil fraud in several lawsuits, and was targeted by a $220 million Swiss criminal probe in relation to CHS in 2010. [11] It has also been reported that the SEC was investigating Osorio for "possible violations of federal securities laws." [12]
In 2007, Osorio founded Innovida, which was a manufacturer of building materials: [13] "The company opened factories in North Miami Beach and several foreign countries. Osorio courted celebrities in January 2010 to sell the notion that he would help provide affordable homes to victims of the devastating earthquake in Haiti."[ clarification needed ] [14] However, a bankruptcy court judge ordered in December 2011 that Innovida be liquidated, after Osorio's "proposal to reorganize the debts of his former company, InnoVida Holdings, was filed in "bad faith" and includes a "nonsense" explanation for what happened to millions of dollars in missing funds." [14]
Innovida received $3.5 million in loans from the US Overseas Private Investment Corporation (OPIC) to build homes in Haiti after the earthquake. In September 2011, OPIC began questioning Innovida's "negative operating cash flow." [15] A court appointed receiver in charge of investigating Innovida's finances indicated that "$37.5 million in funds had been moved offshore, but he had so far been unable to find out what happened to the money." [15] Osorio has used his constitutional privilege of invoking the fifth amendment right against self-incrimination when asked if company funds had been used to pay personal expenses. [16]
Osorio and his former company, InnoVida, have been in bankruptcy since March 2011. After several multimillion-dollar lawsuits, Osorio was forced to put his mansion on Star Island for auction. [16] [17]
Osorio has organised high-profile fundraising events, and has donated to Hillary Clinton, Barack Obama, and the Democrats more than $80,000 according to Federal Electoral Commission records.
Former Gov. Jeb Bush has agreed to return $270,000 that he was paid as a consultant to convicted fraudster Claudio Osorio and Osorio’s companies. [18]
On Friday, December 7, 2012, Claudio Osorio, and Craig Toll, InnoVida's CFO, were arrested in Miami, Florida after being indicted on two counts of wire fraud and one count of major fraud, amongst other charges. [19] Both Osorio and Toll also face fraud charges by the SEC for violations of federal securities laws.
Federal prosecutors said that Osorio defrauded investors from 2007 to 2010, exaggerating the company's finances and pocketing millions of dollars to fund a lavish lifestyle. [20] The SEC claimed that Osorio had illegally used investor money to pay for a Miami Beach mansion, a Maserati car and a Colorado mountain retreat home. [21] [22]
Crazy Eddie was a consumer electronics chain in the Northeastern United States. The chain was started in 1971 in Brooklyn, New York, by businessmen Eddie and Sam M. Antar, and was previously named ERS Electronics. The chain rose to prominence throughout the Tri-State area as much for its prices as for its memorable radio and television commercials, featuring a frenetic, "crazy" character played by radio DJ Jerry Carroll. At its peak, Crazy Eddie had 43 stores in four states and reported more than $300 million in sales.
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Participants in the Madoff investment scandal included employees of Bernard Madoff's investment firm with specific knowledge of the Ponzi scheme, a three-person accounting firm that assembled his reports, and a network of feeder funds that invested their clients' money with Madoff while collecting significant fees. Madoff avoided most direct financial scrutiny by accepting investments only through these feeder funds, while obtaining false auditing statements for his firm. The liquidation trustee of Madoff's firm has implicated managers of the feeder funds for ignoring signs of Madoff's deception.
The recovery of funds from the Madoff investment scandal has been underway since the scandal broke in December 2008. That month, recovery trustee Irving Picard received funds from the Bank of New York account where Bernard Madoff held new investments into his Ponzi scheme. As it has been concluded that no legitimate investments were made on the investors' behalf for at least the last 12 years of operation, recovery has proceeded on a "money in/money out" basis. Investors are entitled to receive no more than the nominal cash amounts that they paid in and did not subsequently withdraw, without regard to inflation, interest, opportunity cost or the false statements that Madoff provided them. Those statements combined to a total balance of approximately $64 billion, while the admitted claims amount to $19.5 billion. As of March 2023, the trustee had recovered $14.6 billion toward these claims through legal action against Madoff associates, feeder funds and beneficiaries of the scheme, and had made fourteen distributions to investors. Action by the Department of Justice has recovered an additional $4 billion.
Kaleil Isaza Tuzman is a former entrepreneur associated with digital media, who spent more than 20 years in that industry before being convicted of multiple counts of fraud in 2017. Tuzman started his career at Goldman Sachs, was co-founder of GovWorks.com, served as President of JumpTV, and then as chief executive officer and chairman of KIT Digital, Inc. On September 7, 2015, he was arrested in Colombia and held in a Bogotá prison until being extradited to the United States to face charges of fraud and market manipulation in connection with the defrauding of investors in KIT Digital and two investment funds. He was convicted on all counts in December 2017.
InnoVida was a manufacturer of building materials, founded by businessman Claudio Osorio. It entered bankruptcy in 2011, one in a string of companies taken into bankruptcy under Osorio's leadership.
CHS Electronics is a former multinational distributor of microcomputer products, personal computers, peripherals, networking products, and software.
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